Asian Pulp & Paper (APP), based in Jakarta, Indonesia, holds the top spot as the world’s leading pulp and paper supplier. Chinese Indonesian tycoon Eka Tjipta Widjaja started the company in 1972, when he formed APP’s parent company, the Sinar Mas Group, with co-founder, Singgih Wahab Kwik, who was linked to the Suharto ruling family.
As a member of the RGE Group, which was founded by Sukanto Tanoto in 1973 and headquartered in Singapore, APRIL itself was formed in 1993 when it began plantation development and mill construction in the town of Pangkalan Kerinci, located in Sumatra’s Riau province.
Now accounting for about 80 percent of Indonesia’s total pulp and paper output, both APP and APRIL have intertwined histories.
In 1975, the APRIL-linked Suharto, who was then-president of Indonesia, approved Tanoto’s request to open a plant after Tanoto convinced him of its potential economic benefits and both companies suffered considerable losses during the 1997 financial melt-down.
Celebrated by the environmental action groups who consistently got the impending collapse wrong, both companies, despite the claims made by all sort of extremist activists, control 80 percent of the global market, much to the dismay of the activists.
The Green industrial-complex of so-called green experts with heavy foreign funding emerged targeting the two competitors viciously with product boycotts and divestment campaigns.
Indonesian policy officials lack the comprehension, and some argue, the wisdom to protect the two companies, which despite the allegations, innuendos and deliberate false reporting, are a fixture in the embattled national economy of Indonesia.
APRIL and APP employ over 500,000 employees across the prime industry spread. Much to the dismay of the environmentalists who attacked both companies in a protracted campaign since 1995/96, both companies continue to rule the global paper and pulp and palm oil market with much needed quality in both paper and palm oil.
The green action groups have, without doubt, harmed both, APP and APRIL and the national economy.
Scandals, Lawsuits & Success
Since the 1970s, the two global powerhouses have faced political and personal drama, often seen as masterful moguls aging over decades and not unlike their western counterparts, and their second and third generations of great wealth – have grown up.
Widjaja’s four sons, who are in their 40s and 50s, hail from Asia’s “go-go” dancing years from the late 1980s through mid-1990s and therefore never learned the same lessons of hardship as their father. None of Widjaja’s children has been named as an APP successor.
To make matters worse, in 1999, the Indonesian government kicked the Widjajas out of their own bank.
Tempo, an Indonesian magazine, was sued and lost a defamation suit filed by Tanoto, and the former has been at war with the Indonesian conglomerate ever since.
In an ugly spat over the spoils, the niece used the foreign NGOs and Tempo to press more money out of her uncle. According to Forbes.com, the dispute was settled in 2002 but seemingly the dispute continues to rage on much to the delight of the environmental groups.